Introduction Crmm

8/2/2019 Introduction Crmm

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CUSTOMER RELATION

MANAGEMENTSubmitted by

MRIDHUL SIVADAS

SANEESHA MOHAN

RAKHEE RAJ

SUMI UNNIKRISHNAN

SHAFEER ALI


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INTRODUCTIONOver a century ago, in small-town America, before the

advent of the supermarket, the mall, and the automobile,

people went to their neighborhood general store to

purchase goods. The proprietor and the small staffrecognized the customer by name and knew the customer's

preferences and wants. The customer, in turn, remained

loyal to the store and made repeated purchases.

This idyllic customer relationship disappeared as the

nation grew, the population moved from the farm

communities to large urban areas, the consumer became

mobile, and supermarkets and department stores wereestablished to achieve economies of scale through mass

marketing.

Although prices were lower and goods more uniform in

quality, the relationship between the customer and the

merchant became nameless and faceless. The personal

relationship between merchant and customer became a

thing of the past. As a result,


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customers became fickle, moving to the supplier who

provided the desired object at lowest cost or with the mostfeatures.

The last several years saw the rise of Customer

Relationship Management as an important business

approach. Its objective is to return to the world of personal

marketing. The concept itself is relatively simple. Rather

than market to a mass of people or firms, market to eachcustomer individually.

In this one-to-one approach, information about a customer

(e.g., previous purchases, needs, and wants) is used to

frame offers that are more likely to be accepted. This

approach is made possible by advances in informationtechnology.

CRM involves all of the corporate functions (marketing,

manufacturing, customer services, field sales, and field

service) required to contact customers directly or indirectly.

The term touch points is used in CRM to refer to the

many ways in which customers and firms interact.


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OBJECTIVES OF CUSTOMER

RELATIONSHIP MANAGEMENT

Uses Technology to:

Collect

Sort

Integrate customer data

The objectives are:

Understand customer needs better

Maintain long long-term customer relationships

Be able to pursue a strategy of Relationship Marketing


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COMPONENTS OF CRM

Customer:The customer is the only source of the

companys present profit and future growth. However, a

good customer, who provides more profit with less

resource, is always scarce because customers are

knowledgeable and the competition is fierce. Sometimes it

is difficult to distinguish who is the real customer because

the buying decision is frequently a collaborative activity

among participants of the decision-making process.

Information technologies can provide the abilities todistinguish and manage customers. CRM can be thought of

as a marketing approach that is based on customer

information

Relationship:The relationship between a company and its

customers involves continuous bi-directional

communication and interaction. The relationship can beshort-term or long-term, continuous or discrete, and

repeating or one-time.

Relationship can be attitudinal or behavioral. Even though

customers have a positive attitude towards the company


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and its products, their buying behavior is highly situational.

For example, the buying pattern for airline tickets depends

on whether a person buys the ticket for their family

vacation or a business trip. CRM involves managing thisrelationship so it is

Management:CRM is not an activity only within a

marketing department. Rather it involves continuous

corporate change in culture and processes. The customerinformation collected is transformed into corporate

knowledge that leads to activities that take advantage of the

information and of market opportunities. CRM required a

comprehensive change in the organization and its people.


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COST GOALS

Major cost goals of CRM include:

oIncrease revenue growth through customersatisfaction.

oReduce costs of sales and distributionoMinimize customer support costs

The following examples illustrate tactics to achieve these

goals;

1. To increase revenue growthoIncrease share of wallet by cross-selling

2. To increase customer satisfactionoMake the customers experience so pleasant that the

customer

oReturns to you for the next purchase.3. To reduce cost of sales and distributionoTarget advertising to customers to increase the

probability that an offer is accepted.


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oUse web applications to decrease the number of directsales

people and distribution channels needed

oManage customer relationships rather than manageproducts (achange in marketing)

4. To minimize customer support costs

oMake information available to customer servicerepresentatives so they can answer any query

oAutomate the call center so that representatives havedirect access to customer history and preferences and

therefore can cross-sell.


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Four basic tasks are required to achieve the basic

goals of CRM.

1. Customer IdentificationTo serve or provide value to the customer, the company

must know or identify

the customer through marketing channels, transactions,

and interactions over

time.

2. Customer DifferentiationEach customer has their own lifetime value from the

company's point of view

(Appendix B) and each customer imposes uniquedemands and requirements

for the company.

3. Customer InteractionCustomer demands change over time. From a CRM

perspective, thecustomers long-term profitability and relationship to the

company is important. Therefore, the company needs to

learn about the customer continually. Keeping track of

customer behavior and needs is an important


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task of a CRM program.

4. Customization / PersonalizationTreat each customer uniquely is the motto of the entire

CRM process.

Through the personalization process, the company can

increase customer

loyalty. Jeff Bezos, the CEO of Amazon.com, said, ourvision is that if we

have 20 million customers, then we should have 20 million

stores. The automation of personalization is being made

feasible by

information technologies.


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IT FACTORS OF CRMTraditional (mass) marketing doesnt need to use

information technologiesextensively because there is no need to distinguish,

differentiate, interact with,

and customize for individual customer needs.

Although some argue that IT has a

small role in CRM each of the four key CRM tasks

depends heavily on information technologies and systems.

CRM ISSUESCUSTOMER PRIVACYCustomer privacy is an important issue in CRM. CRM

deals with large amounts of

customer data through various touch points and

communication channels. The

personalization process in CRM requires identification of

each individual

customer and collections of demographic and behavioral

data.


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Yet, it is the very information that most customers

consider personal and private.

The individual firm is thus caught in an ethical dilemma. It

wants to collect as

much information as possible about each customer to

further its sales, yet in

doing so it treads at and beyond the bounds of personal

privacy.

Privacy issues are not simple. There are overwhelming

customer concerns, legal

regulations, and public policies around the world. Still it is

unclear and undetermined what extent of customer privacy

should be

protected and shouldnt be used, but four basic rules mightbe considered.

oThe customer should be notified their personalinformation is collected and will be used for specific

purposes.

oThe customer should be able to decline to be tracked.oThe customer should be allowed to access their

information and correct it.


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oCustomer data should be protected fromunauthorized usage.Some companies provide customer consent form to ask

the customer to agree to information collection and usage.

Providing personalized service to customer

is a way to satisfy customers who provided their personal

information. All of these efforts are designed to build trustbetween the company and its customers.

TECHNICAL IMMATURITYThe concept, technologies, and understanding of CRM are

still in its early

adapter stage. Most of the CRM technologies are immature

and the typical

implementation costs and time are long enough to frustrate

potential users.Many software and hardware vendors sell themselves as

complete CRM solution


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providers but there is little standardized technologies and

protocols for CRM implementation in the market. Even

the scope and extent of what CRM

includes differ from vendor to vendor; each has differentimplementation

requirements to achieve the customers expectations.

CRM is one of the busiest industry which occurs frequent

merger and

acquisition. Many small companies merge together to

compete with largevendor. Large companies such as PeopleSoft acquired

small vendor to enter this

hot CRM market. Due to these frequent merger and

acquisiton, the stable

technical support from the market becomes rare. Vendors

publish new version maybe more integrated software of CRM software as

frequently as they can

and customers should pay for that.

Often these technical immaturities or unstable conditions

are combined with

the customer requirements which are frequently unclear

and lead the projectfailure. These technical immaturities may be overcome

over time, but the

process may be long and painful.


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CONCLUSION

The present is an era of company loyalty to the customerin order to

obtain loyalty of customers to the company. Consumers

are more knowledgeable than ever before and, because the

customer is more knowledgeable, companies

must be faster, more agile, and more creative than a few

years ago.

The Internet allows information to be obtained almost

instantaneously.

The Internet permits firms to establish a personalized

customer experience through online help, purchase

referrals, quicker turn-around on customer

problems, and quicker feedback about customer

suggestions, concerns, and questions.


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BIBILIOGRAPHY

Referred secondary data- Internet

Documents

Introduction Crmm